Problem - Feed the Birds Corporation reviewed the following account balances from its accounting records for the year ended December 31, 2006, before adjustment:
Accounts receivable $90,000
Allowance for Uncollectible Accounts (before adjustment) 1,750 credit
Credit sales during 2006 480,000
Collections from customers during 2006 510,000
Required:
a. Uncollectible accounts are determined by the percent-of-sales method to be 2% of credit sales. Compute the uncollectible account expense for 2006.
b. Uncollectible accounts are determined by the percent-of-sales method to be 2% of credit sales.
c. Determine the balance in the Allowance for Uncollectible Accounts account after the adjusting entry is recorded.
d. Uncollectible accounts are determined by the aging method to be $2,740. Compute the uncollectible account expense for 2006.
e. Uncollectible accounts are determined by the aging method to be $2,740. Compute the net realizable value of accounts receivable on December 31, 2006.